AB 1783 Necessitated By Ricardo Lara’s Pay-to-Play Scandal and the $2 Million Success Bonus Awarded to Lara’s Political Mentor for Lobbying Him While Evading Disclosure Laws
FOR IMMEDIATE RELEASE
April 28, 2022
(Sacramento, CA)--Yesterday, the Assembly Elections Committee unanimously approved, in a bipartisan vote, Assemblymember Marc Levine’s legislation, AB 1783, which would require anyone paid to influence mergers and acquisitions of domestic insurance companies or health care service plans to register with the State as a lobbyist and comply with State lobbyist reporting and disclosure requirements required by law. AB 1783 would close a loophole that until now has allowed a person to avoid lobbying rules and regulations in California.
Levine’s legislation was necessitated by incumbent Insurance Commissioner Ricardo Lara’s pay-to–play scandal, in which lobbyists connected to Lara made $2 million lobbying him on behalf of Lara’s insurance company donor, while evading disclosure laws for lobbying activity.
After Lara was sworn into office in 2019, it was revealed he had accepted tens of thousands of dollars in insurance money during his campaign from executives at insurance company, Applied Underwriters, and their spouses. At the time, Applied was seeking to merge with its subsidiary, a merger that required approval from Lara’s department. Applied hired two “consultants” to lobby Lara–including his former mentor, Fabian Nunez. These lobbyists met with Lara, but were able to circumvent lobbying disclosure laws while doing so. After Lara let the merger go through, thes lobbyists sued Applied for a $2 million success bonus they claimed they were owed. A review of news stories about the scandal and an explainer video can be found here.
“The Insurance Commissioner is supposed to stand with the people of California and stand up for ethics and transparency,” said Assemblymember and candidate for Insurance Commissioner, Marc Levine. “Ricardo Lara has repeatedly shown who he stands with and what he stands for. Lara does the bidding of his insurance donors, helps his lobbyist friends make millions, and fights against transparency in government—even going so far as to attempt to automatically delete government emails. When I’m Insurance Commissioner, we will end the corruption, hold insurance companies accountable, and ensure all Californains have access to quality and affordable coverage.”
AB 1783 is part of a broader reform package authored by Levine to restore ethics and transparency to a department plagued by scandal under its current leadership. Levine’s bills would also require the Insurance Commissioner to publicly disclose all meetings between their office and any interested party (including lobbyists and insurance company executives), mandate transparency from insurance companies about their investments in and underwriting of fossil fuel projects, and protect government documents from being deleted by unscrupulous public officials.
AB 1783 now heads to the Assembly Appropriations Committee.